Mumbai, 28 May (Commoditiescontrol): For the week concluding on May 25, 2023, Burma Urad's price demonstrated a downward trend, declining by Rs 100-125 per 100 Kg due to limited mill purchases due to the slow offtake of Urad dal. This price decrease was influenced by other factors, such as limited liquidity, an incoming supply of roughly 26,000 tons from Burma, and an increase in the arrival of the domestic Urad summer crop at key production centres.
In addition to the factors mentioned above, the recent directive from the Consumer Affairs Ministry imposing a 30-day timeframe for importers to swiftly release Urad in the market after customs clearance further intensified the pressure on prices. This strategic measure by the government aims to regulate the prices of essential pulses. In May, Rohit Kumar Singh, the Secretary of Consumer Affairs, cautioned Myanmar exporters against stockpiling and warned that trade in pulses between Myanmar and India could be restricted to government-to-government contracts if intentional delays in the stock release were observed.
In Chennai, for immediate delivery of the Burma Urad SQ variety was priced at Rs 8,750/quintal, while in forward deals for June delivery, the price stood at Rs 8,900/quintal. On the other hand, the Burma Urad FAQ variety maintained its stability with a price of Rs 7,850/quintal in the ready delivery trade.
Over the past week in Jalgaon, the price of desi Urad declined by Rs 50, fluctuating between Rs 7,800 and Rs 8,400 per 100 kg, contingent upon quality. The most recent update from the Jabalpur market places the new domestic Urad price range between Rs 6,700 and Rs 7,800 per 100 kg, with the arrival of 6000 bags.
The Mumbai market reported a decrease in Urad dal price by Rs 200 per quintal for the week, trading between Rs 10,300-11,300 per 100 kg due to limited retail sales.
The new rabi Urad crop from the Krishna district displayed a decline for Vijayawada delivery, trading at Rs 8,300 per 100 kg, a drop of Rs 250-300. Guntur delivery also witnessed a similar decrease, trading at Rs 8,250. The Branded Urad Gota variety's price fell by Rs 100-200, trading at Rs 10,800 per 100 kg.
In Yangon, CNF Chennai SQ variety declined by $5 to $1070 per metric ton. On the other hand, the FAQ urad variety remained stable at $970 per metric ton. Import disparities were noted in both the SQ and FAQ varieties, as the prevailing rates in Chennai were lower compared to the landed cost calculated based on the aforementioned CNF prices.
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As of May 19, 2023, the sowing area for India's summer Urad crop has experienced a minor increase of 0.31%, covering 3.25 lakh hectares compared to 3.24 lakh hectares in the same period last year.
As per technical chart - Urad SQ (Chennai)- Positive short term trend/ Next resistance at Rs 9,250. Click here
As per technical chart - Urad FAQ (Mumbai) - Trending higher / Next resistance at Rs 8,500. Click here
As per technical chart - Urad SQ $ (Burma) - Positive short term trend / Next Resistance at $1125. Click here
Trend: This week, Urad prices experienced a slight decrease attributed to reduced trading activity and decreased buyer interest. Traders had concerns regarding potential government intervention which restricted the buying activity, further contributing to the decline. However, market experts anticipate a resumption of a bullish trend due to ongoing mill purchases, limited seller activity, and decreasing stocks.
Despite this positive outlook, importers of Urad face a challenge due to the government's recent rule mandating stock clearance within 30 days. Importers who have imported Urad at current CNF rates may encounter price disparities in imports, which could result in selling their cargo at a loss if prices fail to rise within a month. These regulations have significantly impacted trade volumes and potentially created an artificial market shortage, due to lower imports which may lead to substantial price increases once demand rebounds.
To resolve this problem, a trade analyst proposes that the government set a maximum selling price for Urad, determined by the current CNF rates. By implementing this measure, importers would have the opportunity to make a fair profit, while also discouraging the import of Urad at prices higher than the current CNF rates. This approach would effectively reduce the demand for Urad at inflated CNF prices in Yangon, leading to a decrease in CNF prices there.
An alternative solution proposed is for the government to directly import Urad from Burma and offer it at subsidized rates in the open market. This approach aims to effectively meet domestic demand while ensuring price stability for consumers.
(By Commoditiescontrol Bureau; +91-9820130172)
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